Countries to Watch, (Intellectual) Piracy Wise

Did you know there was a Congressional Anti-Piracy Caucus? (I’ll take a chance and guess not). Neither did I.

The caucus has been in place for six years. The primary goal is laudable — protecting intellectual property, particularly for the entertainment and software industries. I just didn’t know it took a caucus of members of Congress to focus on this issue.

Anyway, the group released its watch list of countries to keep a close eye on. The caucus will offer briefings for congressional delegations traveling to these countries.

The five countries range from the expected (China and Russia) to several surprises (Canada, Spain and Mexico). Do you agree or disagree that these countries are threats? Any anecdotes you can share?

Drew Carey & Reason Analyze Education Revolt in Watts

Drew Carey, famed comedian and host of Reason Magazine’s Reason.TV, recently featured Locke High School in Watts (Los Angeles) to examine how a charter school was implemented to overturn a status quo that had threatened the education — and safety — of local students. It’s a 10-minute video, but it’s definitely worth your time.


McCormick Motors Offering “Green for Greening” to Staff

The July/August 2009 edition of BizVoice magazine will feature a piece on McCormick Motors — a trailblazing Chevy dealer up in Nappanee that recently initiated a solar panel into its total energy conservation plan. That plan has featured recycling and waste reduction, lighting and furnace changes, and some serious energy efficiency moves. Gordon Moore, McCormick Motors’ VP, told me they’ve also integrated an employee incentive plan. The company’s web site explains:

In March 2009, McCormick Motors established an energy conservation and efficiency fund for every full time employee that is a home owner. At the beginning of each calendar year, up to $500 of matching funds will be available to participating employees. This money is available to offset expenditures made by an employee based on $.25 for every $1.00 spent on a home improvement that is directly related to energy conservation or efficiency. Funds may be drawn at any time provided the following criteria are met.

  • Participating employees must complete a home energy audit before funds will be distributed. The audit is the annual enrollment form for the program.
  • Projects must demonstrate that they will directly contribute to energy conservation or efficiency.
  • Paid receipts for completion of the project must be presented when reimbursement is requested. Paid receipts more than six months old are not eligible for reimbursement.
  • Projects related to new construction or home expansions are not eligible for reimbursement.
  • Reimbursement is only for materials and/or contracted labor. There is no reimbursement for individual employee labor on the project.

The policy reinforces McCormick Motors’ commitment to reduce energy consumption and minimize the environmental impact by encouraging our employees to follow our lead in reducing our energy consumption. Additionally, the program has the potential to inject $60,000 into the local economy.

Food for thought as a way to build staff rapport and protect the environment as well.

Broadband Buildout: Public or Private?

Australia has an intriguing plan to build a state-of-the-art broadband fiber network covering most of the nation. A public-private investment of $33 billion over eight years would reach 90% of homes and businesses, with wireless and satellite technology used to access the remaining 10%.

A senior adviser to President Obama is reportedly a big fan of the idea. Susan Crawford, a member of the National Economic Council, noted in a recent policy forum that Singapore is making a similar investment and that plans are being considered in Britain and the Netherlands.

The Federal Communications Commission is to present a national broadband strategy to Congress by early next year. A public network in the U.S. would equal the $33 billion in Australia — and an estimated $400 billion more.

Benefits: increased access and lower monthly rates. Pitfalls: another huge tax increase to pay for the project and a potential decline in private sector investment — decreasing competition in the long run.

In local communities, there are a few stories of public ownership success, but more examples of failures. Increasing access is critical, but at what cost? With government already on a spending spree, a better alternative would seem to be to make it easier for enhanced private sector investment.

Budget Forecast is New — and Different

At today’s State Budget Committee meeting, a new revenue forecast for fiscal years 2009-2011 showed a nearly $1.1 billion decline from the forecast offered less than six weeks ago.

No, as committee chair Luke Kenley (R-Noblesville) pointed out, that doesn’t mean a $1.1 actual loss but a decline from a projected increase that many had doubted when it was delivered.

The forecasters went back to the drawing board to try and figure out why the April projections were so far off of the actual April collection. An expanded group of technical advisors decided to revise their sales tax collection model and added variables to the income tax model to adjust each of the three fiscal years.

The projected decreases (from April’s outlook): $444 million in fiscal 2009, followed by $331 million in 2010 and $316 million in 2011. While the projected revenue decline of 7.5% from 2008 to 2009 is unprecedented in state history, forecasters noted that it is a smaller decline than nearly all other states (including Michigan at an astounding 20%).

Kenley offered that more attention should be paid to the actual revenue numbers — $12.9 billion, $13.1 billion and $13.6 billion for the 2009-2011 period, respectively. That compares to a state that operated in 2008 on a budget of less than $13 billion after state agency budget cuts were ordered and enacted. His conclusion, including the addition of the federal stimulus funds: "If we can flat fund or come close to it over the next three years, we will be OK."

Bill Crawford (D-Indianapolis), chair of the House Ways & Means Committee, isn’t ready to buy into that approach. He said during the meeting that he and House Speaker Pat Bauer (D-South Bend), "want to make sure if we adopt the hunker down, man the barricades mentality, that we don’t allow the education infrastructure to decline unnecessarily." It appeared that others on the committee, through their reactions, were questioning whether flat-lining would be enough. In other words, this battle is far from over.

Crawford expressed "discomfort" with the fact that a dramatically different budget forecast was presented today as compared to April 17. He noted that while part one of his AAA philosophy (acquire information) is complete, it is time for analysis before deciding how to act.

Next up: a budget proposal from Gov. Mitch Daniels, likely next Monday, June 1.

Indy Columnist Analyzes National Mitch-Mania

The Indianapolis Star’s Matthew Tully offers analysis on just why it is national talking heads have become so enamored with Indiana’s governor. This comes on the heels of National Review — a magazine popular in some GOP circles — making Mitch its cover story this week. Tully surmises:

Question: Why does the national media suddenly have a crush on Daniels?

Answer: Two reasons: First, he’s blunt and always has something interesting to say. That got him in trouble in Indiana a few years back but plays well on the national stage. Second, unlike many other Republicans, he won last year. It makes sense that political watchers would turn to someone who, as the National Review wrote, "has been able to achieve success in the face of prevailing political and economic headwinds." (It should be noted that Daniels overcame relatively light headwinds by running against Jill Long Thompson, one of the weakest candidates Indiana had seen in decades.)

Q: Does any of this suggest the governor is running for president?

A: Daniels has insisted he will not be a candidate for president in 2012, and most Indiana political insiders believe him. That is likely to keep his profile lower than that of others who are dreaming about the White House. But Daniels’ noncandidacy adds heft to his advice for the national Republican Party. After all, if he’s not angling for a bigger job, everything he says can be taken as an honest appraisal of the party or policy issues — and not a calculated move intended to build support among GOP primary voters.

Q: So what’s his angle?

A: Well, I’d never presume to know what’s going on inside Daniels’ head. But it’s hard to deny he is a man of big ideas, and a guy who enjoys offering those ideas publicly so that others can debate them. He is clearly disappointed with the state of the Republican Party. It makes sense that he would try to draw attention to some of his ideas for the GOP — such as the very sensible idea of actually having ideas.

A (Energy) Tax You Need to Understand

In Washington, they call it cap and trade. In Indiana, energy tax is the more common moniker. No matter the name, what does it mean for your organization — and all Hoosiers? In simple terms, a lot.

Find out just how much June 5 during the Chamber’s next Policy Issues Conference Call.

Vince Griffin, our energy and environmental expert, will explain the proposed legislation, its potential impacts and why Indiana is at the crossroads of the debate. Cameron Carter, who leads the way on federal topics, will outline the Washington politicians and personalities involved, as well as the Indiana connections.

In the mountain of major issues being debated in Washington, this one is at (or very near) the peak. Take 60 minutes, learn more and get your questions answered on Friday, June 5.  Registration is required for this free Chamber member event.

IPOs a Good Sign

How about some good financial news? Really! I’m not kidding.

No, it doesn’t mean this current economic downturn is over — but it is a step in the right direction. Last week, two initial public offerings for technology-based companies got off to a positive start. The companies (OpenTable, an online restaurant reservation service; and SolarWinds, which makes network management software) could be harbingers of good things to come.

Venture capitalists have seen little, if any, recent return on their investments. Only six venture-supported start-up companies went public last year. That was the lowest since 1977 and a dramatic freefall from the 86 IPOs in 2007 and the 100-plus prior to the bursting of the technology bubble.

Experts say the changed financial landscape will prevent a return to the IPO glory days of the past decade. Why? New banking and accounting rules make it more difficult to go public; big banks bought many of the smaller banks that were active in taking start-ups public; and with additional pressures, fewer banks and investors are spending time researching the smaller companies.

But those experts would like to eventually return to an average of 50 IPOs a year. And this could be a start in the right direction.

Proposed Federal ‘Solutions’ Could Pose Major Problems for Small Businesses

The National Center for Policy Analysis analyzes how proposed attempts to help the country via more taxes and more regulation could punish America’s small businesses.

The  NCPA contends:

We need policies that encourage small-business owners to invest in their businesses, hire more people and continue to grow their businesses.  Unfortunately the administration’s proposal to raise taxes on those earning $250,000 or more will create burdens and barriers to small-business growth and success, says Neese:

  • Under those new tax plans, 1.3 million small-business owners would pay more taxes.
  • These small businesses are not subject to the 35 percent corporate income tax rate.
  • Instead, they report "flow-through" income from sole-proprietorships, partnerships, and S-corporations on individual tax returns.
  • The total tax bill for small businesses as a result of these tax increases would be $30.1 billion.

If this small-business tax increase becomes reality, many small-business owners will not be able to expand their businesses.  Not only will they not be able to hire more people, in many instances they will be forced to lay off workers.  They won’t be able to buy new equipment.  They won’t be able to invest in their communities, says Neese.

At the National Center for Policy Analysis, we have been working on some solutions that can encourage success now:

  • Make income tax cuts permanent; for example, lower tax rates, especially at the margin, encourage work, investment and reduce tax avoidance.
  • Cut payroll taxes; taxes eat up one-third or more of a small business’s income — reducing the payroll tax will have an immediate impact on small businesses, enabling more investment to grow the business.
  • Health insurance portability; health insurance is a major expense for businesses, so Congress should allow people to carry their health insurance from job to job by allowing small-business owners the opportunity to purchase individually owned health insurance with pretax dollars.

Argosy Going Hollywood, Adding Jobs in Process

The Argosy in Lawrenceburg is about to get an overhaul and, unlike many business-related overhauls over the past year, this one will actually create jobs.

Cincinnati’s Business Courier explains:

When Penn National Gaming this summer opens its $326 million expansion at Lawrenceburg, it will be celebrated for the 125 contractors it employed during construction.

And the 250 new employees now being hired to operate the Hollywood-themed attraction.

And the glitzy trappings of the Vegas-scale gaming parlor, with its 300 plasma screens and 60-foot video board.

And the fancy décor, with its indoor replicas of the Hollywood Bowl, a city park and an urban streetscape.

But few will recognize the new Lawrence­burg casino for what it really is: an act of self-defense.

“This will expand our boundaries,” said Tony Rodio, general manager of the Penn National property on the Lawrenceburg riverfront, which will change its name from Argosy to Hollywood upon its opening in mid-July.

During a recent tour of the nearly finished casino, Rodio said the 270,000-square-foot expansion and its Hollywood rebranding will be part of a larger attempt by Wyomissing, Pa.-based Penn National to lay down roots in Cincinnati. Rodio wants to reclaim customers lost to two new horse-track casinos in Indianapolis and prevent encroachment by developers who have staked claims to potential casino sites from Louisville to Wilmington…

The casino will have 800 more slots, two dozen more poker tables and a VIP lounge that can host up to 110 people for dinners and private parties. Its 60-by-8-foot serpentine video screen will play movie trailers, promotional messages and memorable movie scenes on a 24-7 scrolling loop.